Is globalisation dead?
That’s one of the big questions on minds at the World Economic Forum in Davos, Switzerland.
The explosion in global connectivity and trade that was widely taken for granted for decades is certainly under pressure.
From the COVID-19 pandemic to the United States-China rivalry, Brexit and the war in Ukraine, a confluence of factors is challenging the long-held assumption that business and investment should be able to move freely across borders.
Where once the cost of doing business drove investment decisions, firms must now consider geopolitical and national security factors that increasingly drive governments’ policymaking.
Tinglong Dai, an expert in globalisation at Johns Hopkins Carey Business School, is of the view that globalisation, while not dead, is at least struggling to survive.
“In the coming years, we may see the emergence of a ‘supply chain iron curtain’, where Western countries maintain high levels of free trade, investment and movement of people among each other but scrutinise links with China, Russia, and the like,” Dai told Al Jazeera.
“This means that free trade in goods and services in sensitive and strategic categories will be severely restricted – eg semiconductor chips, automotive batteries and public health products – and even mundane supply chains will be subject to increased regulation and public pressure.”
The relatively lacklustre attendance at this year’s World Economic Forum, one of the most closely watched annual gatherings of key leaders in politics and business, itself seems to symbolise the shifting winds.
German Chancellor Olaf Scholz is the only G7 leader in attendance. In 2018, six of the seven leaders of advanced economies, including the then-United States President Donald Trump, attended the gathering.
Key leaders from the Global South such as Chinese President Xi Jinping and India’s Narendra Modi, who attended in 2017 and 2018, respectively, are also notably absent (both addressed the gathering by video link).
European Commission President Ursula von der Leyen, who did attend, used the gathering to announce plans for green industry legislation to rival the US Inflation Reduction Act, which has angered European governments with its subsidies for electric vehicles made in North America.
Even so, a key message coming out of Davos is that globalisation must endure and also, perhaps, that its demise has been exaggerated.
While China has itself turned inward towards greater nationalism and protectionism, Xi, in his virtual address to the gathering, described globalisation as the “trend of the times” and as unstoppable as a river’s flow into the sea.
Appearing in person, Chinese Vice Premier Liu He stressed that foreign investment is still “welcome” and “the door to China will only open up further.”
Historian Niall Ferguson went as far as to describe the idea of a major deglobalisation trend as a “mirage”, noting that Chinese apps such as TikTok and South Korean pop culture continue to be wildly popular across the globe, even if chips and hardware are increasingly subject to protectionist controls.
Even if globalisation may have peaked, it is far from being rolled back completely.
While Apple is seeking to diversify its production out of China, it is notably looking to Vietnam and India, rather than bringing the bulk of its manufacturing back to the US.
In which case, it might be more accurate to say that globalisation is evolving, not retreating – a view shared by James Mittelman, an expert in globalisation and development at American University in Washington, DC.
“Hard evidence shows that the combined effects of the coronavirus pandemic, Brexit, supply-chain disturbances and the Ukraine War have brought barriers to cross-border flows and inefficiencies but not a sizeable withdrawal from globalisation,” Mittelman told Al Jazeera.
“By all indications, the tides of globalisation will continue to tack back and wash forward. For the future, the perplexing issue is not globalisation versus deglobalisation, but what kind of globalisation? And how to achieve an ethically just and politically wise globalised order?”